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TMI Blog2019 (8) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... ase wherein the co-ordinate bench of the Tribunal has deleted the addition in the case of Acchyalal Shaw [ 2009 (1) TMI 303 - ITAT CALCUTTA-B] in respect of sale of shares of M/s QFSL. As inclined to set aside the order of Ld. CIT(A) and direct the AO not to treat the long term capital on sale of shares of M/s QFSL and also the commission expenses as bogus and delete the consequential additions. Therefore, the appeal of assessee is allowed. Addition on account of commission payment for earning the LTCG u/s. 69C - HELD THAT:- Since, we have allowed the assessee s claim of LTCG, the consequential expenses incurred by the assessee in this regard is also allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... s of sale transactions. However, according to Ld. AR, there is no material on record which could lead to a conclusion that the transactions were a device to camouflage activities to defraud the revenue. The Ld. AR placed reliance on various judicial pronouncements and pleaded that the assessee's claim to be allowed. Per contra, the Ld. DR drew our attention to the AO's observation in assessment order that the assessee is one of the "Bogus LTCG" uncovered by the Investigation Wing of the Department in it's survey of the businesses of Prakash Jajodia, an entry operator in Kolkata. The statement of Prakash Jajodia u/s. 131 was recorded and he has stated as follows - "Sir, Name of my company through which I have provided accommodation entry as bogus long term capital gain is, QUEST FINANCIAL SERVICES LTD. This company is listed with Calcutta Stock Exchange. Registered office of this company is 'centre point' 21, Hemanta Basu Sarani, Room No. 230, 2nd floor, Kolkata-01. Myself is the managing director of this company. I decide all the affairs of company. I have managed this affairs with the help of other entry operators, like Vinod Kuma5r Jajoo and Mr. Balkrishan Sikar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o my notice by the Ld. AR that this Tribunal in the case of Acchyalal Shaw Vs. ITO in ITA No. 1977/Kol/2008 , AY 2003-04 dated 16.01.2009 have accepted the scrips of M/s. QFSL as not bogus and held that the LTCG claim of the assessee needs to be allowed: "On hearing the rival submissions, perusing the case record along with the case laws and placing reliance on various decisions it transpires that in a transaction like this (all offmarket transactions) any enquiry from the stock exchange will not yield result in favour of the Revenue. The Revenue has to see whether the sale has been effected or not as per the documents and as per the acceptance and admission of the respective stock brokers. As it has been assertively argued by the learned Authorised Representative in this case that both the stock brokers had not denied the transactions and the capital gain has been shown, the AO simply by casting doubt for alleged purchase of house property for ₹ 11,00,000 cannot treat the same as cash credit and cannot take the same in his cash credit. In our considered opinion, suspicion cannot replace the real evidential document. Simply by arguing it to be a case of manipulation the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court in case of CCE vs. AndamanTimber Industries 127 DTR 241(SC) and cannot be the basis to disallow the claim and without finding fault with the evidences furnished by the assessee. 5. It is noted that the facts of the case of the assessee are identical with the facts in the above case wherein the co-ordinate bench of the Tribunal has deleted the addition in the case of Acchyalal Shaw (supra) in respect of sale of shares of M/s QFSL. I, therefore, respectfully following the same and the facts in the instant case as taken note in para 2 supra and discussions, am inclined to set aside the order of Ld. CIT(A) and direct the AO not to treat the long term capital on sale of shares of M/s QFSL and also the commission expenses as bogus and delete the consequential additions. Therefore, the appeal of assessee is allowed. 6. Ground no. 2 is in respect of confirming the addition of ₹ 80,9945/- on account of commission payment for earning the LTCG u/s. 69C of the Act. Since, we have allowed the assessee's claim of LTCG, the consequential expenses incurred by the assessee in this regard is also allowed. 7. Before I part, I would like to deal with the case laws cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Bombay High Court in Sanjay Bimalchand Jain v. PCIT, Order dated 10.04.2017 (Bom.), being judgment of Jurisdictional High Court. However, in this case, the AO observed that the assessee had taken entries and paid cash of equivalent amount and received back by cheque. And on the basis of such adverse inference, the Tribunal confirmed the addition made by the AO. However, in the present case in hand, there is no such finding made by the AO. Further. It is noted that the abovementioned judgment of ITAT, Mumbai Bench has been considered and distinguished by the ITAT, Kolkata Benches and other Benches of the Tribunal, inter-alia, in the following cases: a. Satyanarayan Saria vs. ITO [ITA No.1224/KoIl2016, Order dt. 28.06.2019 (Kol ITAT)] b. Kaushalya Agarwal vs. ITO [ITA No.194/KoIl2018, Order dt. 03.06.2019 (Kol, ITAT)] c. Meenu Goel vs. ITO [2018] 94 taxmann.com 158 (Del-Trib) Reference is also made to the recent judgment dated 01.07.2019 rendered by this Tribunal in the case of Aparna Misra Vs. ITO (ITA No. 161/Kol/2019) wherein the Tribunal had relied upon the following jurisdictional Calcutta High Court judgments to decide similar issue in favour of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Mumbai ITAT in its following judgments while allowing similar issue in favour of the Assessee: a. DCIT vs. Anil Kainya [ ITA Nos.4077 & 4078/MUM/2013, Order dt. 22.03.16 Mum ITAT)] b. Anjali Pandit vs. ACIT [2017] 88 taxmann.com 657 (Mumbai - Trib.) Further, it is noted that lthe said judgment has been considered/distinguished by the Kolkata and other Benches of the Tribunal, inter-alia, in the following cases while allowing similar issue in favour of the assessee. a. Kaushalya Agarwal vs. ITO [ITA No.194/Kol/2018, Order dt. 03.06.2019 (Kol ITAT)] b. Anupama Garg vs. ITO [ITA NO.5971/0el/2018, Order dt. 12.12.2018 (Del, ITAT)] c. Radhika Garg. vs. ITO [ITA No.4738/0el/2018, Order dt. 01.01.2019 (Del-Trib) 4. Coming to the case of Vidya Reddy - ITA No.126/Chny/2017 -Chennai ITAT had disallowed the claim of exempt LTCG and had confirmed the addition made on the ground that the assessee has not placed any material before the lower authorities to prove that her transactions are genuine. The Tribunal observed "She has also not placed any material to prove that her claim of exemption u/s. 10(38) is genuine and valid." However, in the case of the assessee company all relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT)] b. Yogesh Dalmia vs. ACIT [ITA No.113/Kol/2018, Order dt. 03.06.2019 (KoI ITAT)] c. Navin Kumar Kajaria vs. ACIT [ITA No.1254-55/Kol/2018, Order dt. 03.04.2019 (Kol- Trib) d. Soumitra Choudhury vs. ACIT [ITA No.256/Kol/2019, Order dt. 15.03.2019 (Kol ITAT)] 6. Coming to the case of Abhimanyu Soin [2018-TIOL-733-ITAT-CHD - The Chandigarh Bench of Tribunal had confirmed the addition made by AO after observing that "11. The assessee has failed to prove that the purchase and sale transactions are genuine and could not even furnish and iota of evidence regarding the sale of shares .............". However, in the case of the Assessee Company all relevant documents were furnished to support, and prove beyond all doubts, purchases and as well as sale of shares, which was evidently absent in that case, so is not applicable to case in hand. 7. Coming to the case of Balbir Chand Maini Vs. CIT (2011) 12 taxmann.com 276 (P&H) - The Hon'ble Punjab & Haryana High Court had confirmed the addition made by Assessing Officer on the basis of finding of fact by the Tribunal: "10. The Tribunal while adjudicating the issue against the assessee had recorded a finding of fact that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019 (Kol ITAT)] c. Meenu Goel vs. ITO [2018] 94 taxmann.com 158 (Del-Trib) 9. Coming to the case of CIT vs. Sunita Dhadda (Hon'ble Supreme Court judgment dated 06.06.2018), it is noted that this judgment relied upon by the department has no application in the facts of the instant case. The contention of Ld. DR that matter should be set aside to AO for supplying the Assessee with Investigation Wing Report and statements of parties relied upon cannot be applied in each and every case. The assessee company had in the case in hand discharged the onus casted upon it to prove the claim of LTCG/STCL, then it was the bounden duty of the AO to bring out the falsity/fabrication/wrong doing if any on the part of assessee or confront the assessee with any material which is adverse against the assessee and to proceed in accordance to law i.e. in confronting with principle of Natural Justice without doing so, and when assessee placed all documentary evidences before the AO/Ld. CIT(A), the assessee cannot be again sent back before AO and the decision to send back to AO is decided when proper opportunity has not been given by AO during assessment stage and that is not the case here in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be assessed as "Business income" and not under the head "Capital Gains". It is noted that the Learned D/R is trying to put forward a completely new argument which do not emanate out of the orders of the lower authorities and also from the records of the case and thus is not permissible to be raised as this stage. Even otherwise, the ITAT, Delhi Bench in Prem Jain (supra) had held when the facts of the case was that the Assessee had claimed the income from sale of shares to be assessed at business profits and not capital gains where there was short duration of holding of shares and lack of clarity in account books, sale and purchase of shares. In such facts of the case, it was held that profits from sale of shares would amount to business income and not short term capital gain. However, no such case had been made out by the Assessing Officer in the instant cases. The aforesaid order has been considered by this Tribunal while deciding similar issue in favour of an assessee in the case of Kaushalya Agarwal Vs. ITO (ITA No. 194/Kol/2018, order dated 03.06.2019 (ITAT, Kol). More particularly, the judgment of Hon'ble Bombay High Court in Sanjay Bimalchand Jai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt is clearly distinguishable on facts. The said judgment had been held to be distinguishable by the ITAT, Kolkata Benches in the following judgments:- i. Suman Saraf v. ITO in ITA No.1395/KoI/2018, Order dated 05.10.2018. ii. Jignesh Desai v. ITO in ITA No.1394/KoI/2018, Order dated 05.10.2018. iii. Rishab Jain v. ITO in ITA No.1392/KoI/2018, Order dated 05.10.2018. iv. Rekha Devi v. ITO in ITA NO.1269/KoI/2018, Order dated 05.10.2018. v. Sunita Devi v. ITO in ITA No. 1268/Ko1/2018, Order dated 05.10.2018. vi. Jagat Lal Jain v.ITO in ITA No.1226/KoI/2018, Order dated 05.10.2018. vii. Sneha Choudhary v. ITO in ITA NO.1218/KoI/2018, Order dated 05.10.2018. viii. U.C.Choudhary & Ors (HUF) v. ITO in ITA No.1217/KoI/2018, Order dated 05.10.2018. ix. Virendara Barmecha v. ITO in ITA No.1201/KoI/2018, Order dated 05.10.2018. x. Taruna Devi Barmecha v. ITO in ITA No.1199/KoI/2018, Order dt. 05.10.2018. xi. Premlata Agarwal vs. ITO in ITA No.874/KoI/2018, Order dt. 05.10.2018. xii. Sunil Kumar Ladha vs. ITO in ITA No.851/KoI/2018, Order dt.05.10.2018. xiii. Balram Gupta vs. ITO in ITA No.817/KoI/2018, Order dt.05.10.2018. xiv. Alka Changoiwala vs. ITO in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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